Stamp Duties Consolidation Act 1999 section 35

Deeds of enlargement

Section 35 charges stamp duty on a deed of enlargement of a leasehold interest into a freehold interest, as if it were a conveyance on sale, where the lease was created within six years of the deed.

• Section 65 of the Conveyancing Act 1881 allowed a long leaseholder to enlarge a leasehold interest into a freehold by deed, provided the lease exceeded 300 years, more than 200 years remained, and the rent had ceased to be payable or had been released.
• An avoidance scheme exploited this by granting a lease for over 300 years, arranging for the rent to cease, and then enlarging the interest into a freehold without paying ad valorem stamp duty on the deed of enlargement.
• Section 35 counters this by charging stamp duty on the deed of enlargement as a conveyance on sale, where the lease was created by an instrument executed within six years of the deed, with the chargeable consideration being the value of the land determined without regard to the lease term.
• The charity exemption under section 82 does not apply to a deed of enlargement chargeable under this section.